Adjaristsqali Georgia LLC is constructing the 187 MW Shuakhevi Hydro Power Plant (HPP) cascade in the Adjara region with a total investment of around USD 416 million.
The project is backed by international energy and financial organizations, including Clean Energy Invest AS of Norway, The Tata Power Company Limited of India, and the International Financial Corporation (IFC) and is being financed by the Asian Development Bank (ADB), IFC, and the European Bank for Reconstruction and Development (EBRD). AGL CEO Ronny Solberg answers questions from Caucasus Business Week about his project’s progress and the Georgian business environment in general.
Mr. Solberg, can you give us some background about the project and your company’s goals?
We started construction in 2013 and plan to commission the completed plant in January 2017. At the moment, construction is about 80% complete. We have excavated 37 km of tunnels, and the hydro power station and dams are still under construction.
Our company defines success by how well we promote environmentally sustainable economic growth and development in the region. We represent one of Georgia’s largest and most technologically advanced energy projects. The Shuakhevi HPP is the first greenfield hydro project in Georgia that has been accredited by UNFCCC as a CDM project, and it will reduce carbon emissions by approximately 500,000 tons per annum. Our project currently employs around 750 Georgians and contributes roughly USD 4 million in taxes to state and municipal governments annually.
You said that the region’s long-term development is one of your company’s main priorities. What steps are you taking to accomplish this goal?
From the very first day of construction, our greatest challenge was how to play important role in the sustainable development of highland Adjara. We studied local needs and set out to create conditions that would empower residents of Khulo and Shuakhevi to change their lives for better. We are implementing a variety of social projects in highland Adjara which aim to improve the living conditions of people living within the project area and to promote long-term development. These projects include road building, supplying villages with drinking water, community and small business financing and development, scholarships and education projects for local teachers and students, and road safety and health awareness training.
All of our social projects are developed and implemented in collaboration with affected communities.
I would like to ask you about your relationship to the Georgian government. Has working with the government been a challenge, or have they been supportive of your work?
Close cooperation between the Georgian government and our company is a crucial factor in the success of the Shuakhevi HPP. We have received a great deal of support from the government on all stages of our work, especially from the economic teams at various ministries. As an energy project, our main partner is the Ministry of Energy of Georgia. Thanks to their constant support, our project managed to overcome many obstacles.
Our project is a good illustration of how the state and the private sector can jointly create opportunities for sustainable development. We’re not just building a hydro power project – we’re investing millions of laris in more than 70 social projects, each of which is planned and implemented with the direct involvement of local government and residents.
How would you evaluate the business environment in Adjara in general?
Both tourism and construction are in particularly strong positions in Adjara, and investment projects implemented within the past decade clearly demonstrate that Adjara is an attractive place for investors to invest. Based on 2015 investments, energy has also become one of the leading economic areas in region.
As a representative of the energy field, I find this particularly encouraging. Developing the energy sector will support Georgia’s effort to become energy-independent.